Inspired Revenue Grows in Q4 Despite Overall Loss

Inspired reported a substantial revenue increase in Q4, with figures rising by 70.9% compared to 2020's normal revenue from operations. However, when including the VAT rebate during the same period, revenue saw a decline of 6.6%. The company's gaming segment, primarily consisting of land-based slot machines, generated $26.8 million, marking a 49.3% increase. The leisure segment, meanwhile, experienced explosive growth, with revenue skyrocketing by 183.4% to $23.5 million. Virtual sports revenue also rose by 26.1% to $11.0 million, while interactive gaming revenue grew by 35.8% to $5.7 million. In Q4 of 2020, the gaming division received a one-time VAT rebate of $32.5 million due to a court ruling that exempted operators from paying VAT over gaming taxes; this amount was not counted as revenue for that quarter. The company noted that had this rebate been included in the 2020 figures, revenue would have seen a slight decline. Lorne Weil, executive chairman of Inspired, expressed satisfaction with the fourth-quarter results, highlighting double-digit organic growth across the business units while excluding VAT-related figures from the previous year. He stated, "Our results this past year are evidence of our ability to drive sustainable, long-term growth and profitability. The consistent momentum we saw building throughout 2021 and the strong demand that continues to exist for our products across each of our business lines… further support our confidence in the long-term outlook for the company." Although Inspired did not disclose specifics about its expenses, it shared that its EBITDA for Q4 came to $22.0 million, a decrease of 37.0% from Q4 of 2020. This total included $8.5 million from gaming, $8.5 million from virtual sports, $2.6 million from interactive revenue, and $6.3 million from leisure, while the corporate division recorded a $3.9 million loss. After accounting for various costs, including a $10.8 million charge for depreciation and amortization, $6.4 million in interest expenses, $4.4 million in stock-based compensation, and a loss of $2.9 million on the change in fair value of warrants, Inspired posted a net loss of $1.2 million—compared to a profit of $3.1 million in Q4 of 2020. For the full year of 2021, the company’s revenue reached $208.9 million, a 4.6% increase over 2020. Although the complete breakdown of 2021 revenue was not provided, it revealed that $26.0 million originated from virtual sports and $22.7 million from iGaming. The EBITDA for the year totaled $64.0 million, led by virtual sports. The company also incurred $47.0 million in depreciation and amortization expenses, $44.3 million in interest, and $13.0 million in stock-based compensation, contributing to a net annual loss of $36.7 million. In a notable development during Q4, Inspired entered the lottery sector by acquiring Sportech’s lottery technology division for an initial payment of $12.5 million (£9.3 million/€11.1 million). Additionally, Weil announced that Inspired secured a license to offer its games in Ontario, coinciding with the province’s igaming market launch on April 4.